Buying Less, but Shopping More: Changes in Consumption Patterns during a Crisis

Market research data are utilized to examine the use of changes in shopping behavior and changes in the quality of goods purchased as methods of mitigating the effects of the 2002 Argentine financial crisis. Although the total quantity and real value of goods purchased fell during the crisis, consumers are found to be spending more days shopping. This increase in shopping frequency occurs through consumers purchasing lower-quality goods from a wider variety of shopping channels. This paper provides the first estimates of the magnitude of such effects during an economic crisis, and suggests that this increase in shopping frequency can be an important coping mechanism for households. Shopping more often is shown to enable households to seek out lower prices and locate substitutes, allowing a given level of expenditure to buy more goods. * Thanks to Sebastian Gimenez of LatinPanel for help in obtaining and using the market research data used in this study, to Nestor De Cesare for corralito expertise, to Matias Cattaneo and Sebastian Calonico for extremely valuable research assistance, and to comments from seminar participants at SITE 2004, Di Tella, UCLA, Virginia Tech, and the Bay Area Development Day. Financial support was provided by a SIEPR seed grant. Email comments to [email protected].